The Foreign Service Journal, May 2004

MAY 2004 • AFSA NEWS 5 Annuity Overpayment Claims: A Retiree Nightmare In a Feb. 27 letter to the assistant secretary for Resource Management and the chief financial officer, AFSA expressed concern and offered suggestions regarding the manner in which the Retirement Accounts Division is handling annuity overpayment cases. AFSA has heard from 16 retirees who have been informed by RAD that they had received annuity overpay- ments and would be required to repay amounts ranging from $3,500 to $65,000. The written notices to these retirees have been officious and perfunctory. The retirees reported that RAD has not been responsive to their inquiries, does not provide adequate information about the criteria used for judging waiver requests, and has been dilatory in adjudicating requests for waivers. AFSA suggested to management that the department give relief to those retirees who relied in good faith on past retirement division miscalculations. One alterna- tive would be to limit recovery claims to the last three years of overpayment. The IRS permits amendment of tax returns for only the previous three years, so if an overpayment claim is based on a longer period, the retiree cannot recoup overpaid taxes for the extended period. In addition, AFSA sent a letter to the director gener- al urging the State Department to develop a retireeWeb site so that retirees can access their annuity statements, make changes in their pension accounts and keep current on issues related to retirement such as open seasons for health plans. AFSA is closely following this issue and encourages retirees who receive overpay- ment claims to contact AFSA Retiree Liaison Bonnie Brown at brown@afsa.org or (202) 338-4045, ext. 509. USAA Saga Continues In late February, AFSA received a response to AFSA President John Limbert’s most recent letter requesting reconsideration of USAA eligibility for new USAID, FSC and FAS Foreign Service employees. You will recall that USAA originally said that eligibility required that an agency have a specific mission statement demon- strating that it was involved in national security. Therefore, AFSA’s most recent letter to USAA contained the new State-USAID Strategic Plan, which makes an unmistakable linkage between USAID’s work and national security. The AFSA letter also contained other supporting documentation to bolster the clear case that commerce and trade play an important role in our nation’s security as well. Nevertheless, USAA replied that it does not intend to alter its policy. In their own words: “We do not share your conclusion that development assistance in its many forms is what our Board had in mind when eligibility was established for FSOs in the diplomatic corps.” AFSA is accustomed to protracted campaigns and this is going to be one of those. We intend to pursue other avenues to regain eligi- bility, and we welcome suggestions frommembers. AFSA NEWS BRIEFS FLEXIBLE SPENDING ACCOUNTS BILLING ERROR Some of you will have noticed that you were billed twice in pay period 3 for your allotment to the Flexible Spending Account (dependent care and/or health care). This is because the FSAFEDS billing system made an error with the PP3 allotments for all State Department subscribers. FSAFEDS reports that they have worked closely with the State Department to rectify this situation. Refunds are being issued and accounts should have been made whole either before or shortly after the March 4 payday. The important downstream effect of this error is that all subscribers should expect to receive a 1099 statement by Jan. 31, 2005, in the amount of the refund. Since the deduction was taken pre-tax and is now being returned, it must therefore be included as income when you report your earnings for the 2004 tax year. FSAFEDS has apologized for this error. If you have questions or need assis- tance, call FSAFEDS toll-free at 1 (877) FSAFEDS (372-3337) from 9 a.m. to 9 p.m. Eastern time and a benefits counselor can assist you. Briefs • Continued on page 9 Continued from page 2 Need the 2004 FS Pay Table? To assist members, AFSA has posted the 2004 Foreign Service Pay Chart on the AFSAWeb site. Find it at: www.afsa.org/ 2004pay.cfm. JOSH